Vol. 4, No. 4, July/August 1996	Previous Issues Subscribe to AT Messenger Download PDF Viewer
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Financing Assistive Technology
Good News: Cost & Financing Trends in Worksite Accommodations

Ron Sibert, DATI Funding Specialist

Even though the Americans with Disabilities Act (ADA) is now several years old, concerns about legal requirements and the cost of accommodating employees with disabilities still causes discomfort in the business community. Title I of the Americans with Disabilities Act (ADA) requires employers to provide reasonable accommodations to qualified persons with disabilities when: 1) the employee's functional limitations due to disability impede job performance; 2) the person would be able to perform the job with such accommodations; and 3) doing so would not present an undue hardship to the employer. Many such accommodations are, of course, frequently accomplished through the use of assistive technology (AT).

Although the question of cost almost always gets mixed responses, there are several indications that there is a steady trend toward improvement, especially in terms of cost and financing options. For instance, we can expect the net cost to employers of providing accommodations to decrease as they gain more experience at accommodating their employees with disabilities and more adept at using various financing options and incentives. Cost reductions will also continue because equipment, devices, and appliances are increasingly being designed with built-in accessibility. In fact, the recently passed Telecommunications Act of 1996 (Public Law 104-104) calls for newly manufactured products such as televisions, telephones, and computer-related services to be designed with the accessibility built right in.

A recent issue of Successful Job Accommodation Strategies reports that Peter Blanck, a University of Iowa Law professor, compared the average costs of providing workplace accommodations to Sears Roebuck & Co. employees before and after the 1992 implementation of Title I of the ADA. He found that the average accommodation at Sears between 1993 and 1995 cost $45, which is less than half of the $121 average cost between 1978 and 1992! However, critics of Blanck's study note that there may be "hidden costs" that were not factored in. These costs have been described as mostly indirect, intangible, and pretty much avoidable. Examples include disruption of other employees' routines or jobs when a scheduling accommodation is provided. Supporters of Blanck's study agree that there may be indirect costs, but that these are likely to be offset, not only by the savings mentioned earlier, but also by the indirect, but often tangible, benefits of providing reasonable accommodations. Improved productivity and ability to perform job functions, and savings associated with legal compliance, are obvious advantages. Improved general morale and an atmosphere of equity and fairness are less tangible outcomes, but no less significant.

As awareness and use of certain cost-reduction strategies by businesses continues to improve, the prevalence of worksite accommodations is also likely to increase. For example, significant tax incentives exist for businesses to provide accommodations. The Disabled Access Tax Credit (Title 26, Internal Revenue Code, Section 44) is available to eligible small businesses. Fifty percent (50%) of any "eligible access expenditure" (cost of an allowable accommodation) between $250 and $10,250 is deductible for a taxable year. The business may take the credit each year that it makes an eligible access expenditure. Eligible small businesses are those businesses with either:

• $1 million or less in gross receipts for the preceding tax year; or
• 30 or fewer full-time employees during the preceding tax year.

Eligible access expenditures are amounts paid or incurred by an eligible small business that will enable that business to comply with the applicable requirements of the ADA. These include amounts paid or incurred to:

• remove architectural, communication, physical, or transportation barriers that prevent a business from being accessible to, or usable by, individuals with disabilities;
• provide qualified readers, taped texts, and other effective methods of making materials accessible to people with visual impairments;
• provide qualified interpreters or other effective methods of making orally delivered materials available to individuals with hearing impairments;
• acquire or modify equipment or devices for individuals with disabilities; or
• provide other similar services, modifications, materials or equipment.

Expenditures that are not necessary to accomplish the above purposes are not eligible. Expenses in connection with new construction are also not eligible. "Disability" has the same meaning in the tax code as it does in the ADA. To be eligible for the tax credit, barrier removal or the provisions of services, modifications, materials or equipment must meet technical standards of the ADA Accessibility Guidelines where applicable. These standards are incorporated in Department of Justice regulations implementing Title III of the ADA (28 CFR Part 36; 56 CFR 35544, July 26, 1991).

For any business seeking to provide more expensive accommodations, the Tax Deduction to Remove Architectural and Transportation Barriers to People with Disabilities and Elderly Individuals (Title 26, Internal Revenue Code, section 190) provides a means of significantly reducing costs. The Internal Revenue Service (IRS) allows a deduction of up to $15,000 per year for "qualified architectural and transportation barrier removal expenses." Expenditures to make a facility or public transportation vehicle owned or leased in connection with a trade or business "more accessible to, and usable by, individuals who are handicapped or elderly" are eligible for the deduction. The definition of a "handicapped individual" is similar to the ADA definition of an "individual with a disability." To be eligible for this deduction, modifications must meet the requirements of standards established by IRS regulations implementing section 190. IRS Publication No. 907, providing information on these provisions, may be obtained by calling 1-800-829-3676. For further information, call (202) 566-3292 (voice only), or contact: Internal Revenue Service, Office of the Chief Counsel, P.O. Box 7604, Ben Franklin Station; Washington, DC 20044.

Another interesting twist is that some worksite accommodations for workers who have suffered work-related injuries may increasingly be covered by employees' workers' compensation plans. There are significant savings incentives for insurers that write long-term disability plans to pay for accommodations instead, so some experts are advising employers to negotiate or file claims with their injured employees' worker's compensation carriers. However, the employer still has the legal obligation under the ADA to provide reasonable accommodations-regardless of the insurer's willingness to pay.

Finally, while employees with job-related injuries typically receive vocational rehabilitation services through private insurance and service providers, many qualified persons with disabilities in Delaware receive similar services publicly through the State Division of Vocational Rehabilitation (DVR). In such cases, it is possible for employers to share costs with DVR when the accommodation is a legitimate part of the employee's Individualized Written Rehabilitation Plan (IWRP).